workGmailYouTubeMapseBookDirect Labor VariancesThe following data relate to labor cost for production of 6,600 cellular telephones:4,460 hrs. at $12.804,390 hrs. at $13.10Feedbackder=&takeAssignmentSessionLocator &inprogress-falseShow Me HowPrintFavorable✓Direct La✓XActual:Standard:a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negativenumber using a minus sign and an unfavorable variance as a positive number.Rate variance1,338 XTime variance917 ✔UnfavorableTotal direct labor cost variance421 XFavorableVb. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in alower ✔labor rate than planned. The lower level of experience or training may have resulted in less ✔efficient performance. Thus, theactual time require was more X than standard.Get Hom xDDUpdate Direct Materials VariancesThe following data relate to the direct materials cost for the production of 2,300 automobile tires:59,500 lb. at $1.9060,700 lb. at $1.95a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials colt variance. Enter a favorable variance asa negative number using a minus sign and an unfavorable variance as a positive number2,975Quantity variance2,280Favorable5,315FavorableTotal direct materials cost varianceb. The direct materials price variance should normally be reported to the Purchasing Departmentused because of production efficiencies, the variance would be reported to the Production Supervisorbeen caused by the purchase of higher-quality raw materials, the variance should be reported to the Purchasing DepartmentActual:Standard:Price varianceFavorableIf lower amounts of direct materials had beenIf the favorable use of raw materials had

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ellook Show Me How Direct Labor Variances The following data relate to labor cost for production of 6,600 cellular telephones: 4,460 hrs. at $12.80 4,390 hrs. at $13.10 Actual: Standard: a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number, Rate variance 1,338 X Time variance 917 ✔ 421 X Total direct labor cost variance b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in lower labor rate than planned. The lower level of experience or training may have resulted in less ✔efficient performance. Thus, the actual time require was more X than standard. Favorable Unfavorable Favorable ✓

ellook Show Me How Direct Labor Variances The following data relate to labor cost for production of 6,600 cellular telephones: 4,460 hrs. at $12.80 4,390 hrs. at $13.10 Actual: Standard: a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number, Rate variance 1,338 X Time variance 917 ✔ 421 X Total direct labor cost variance b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in lower labor rate than planned. The lower level of experience or training may have resulted in less ✔efficient performance. Thus, the actual time require was more X than standard. Favorable Unfavorable Favorable ✓

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 3PA: Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes...

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Variances Refer to Cornerstone Exercise 9.6. Required: 1. Calculate the variable overhead spending variance using the formula approach. (If you compute the actual variable overhead rate, carry your computations out to five significant digits and round the variance to the nearest dollar.) 2. Calculate the variable overhead efficiency variance using the formula approach. 3. Calculate the variable overhead spending variance and variable overhead efficiency variance using the three-pronged graphical approach. 4. What if 26,100 direct labor hours were actually worked in February? What impact would that have had on the variable overhead spending variance? On the variable overhead efficiency variance? Standish Company manufactures consumer products and provided the following information for the month of February: Required: 1. Calculate the fixed overhead spending variance using the formula approach. 2. Calculate the volume variance using the formula approach. 3. Calculate the fixed overhead spending variance and volume variance using the three-pronged graphical approach. 4. What if 129,600 units had actually been produced in February? What impact would that have had on the fixed overhead spending variance? On the volume variance?
Direct materials variances Bellingham Company produces a product that requires 2.5 standard pounds per unit. The standard price is 3.75 per pound. If 15,000 units used 36,000 pounds, which were purchased at 4.00 per pound, what is the direct materials (A) price variance, (B) quantity variance, and (C) cost variance?
Calculating factory overhead: two variances Munoz Manufacturing Co. normally produces 10,000 units of product X each month. Each unit requires 2 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are 2.50 and 1.50 per direct labor hour, respectively. Cost and production data for May follow: a. Calculate the flexible-budget variance. b. Calculate the production-volume variance. c. Was the total factory overhead under- or overapplied? By what amount?
(Appendix) Calculating factory overhead: three variances Using the data given in E8-17, calculate the following overhead variances: a. Spending variance. b. Production-volume variance. c. Efficiency variance. d. Was the factory overhead under- or overapplied? By what amount? In all problems involving variances, use F and U to indicate favorable and unfavorable variances, respectively.
Direct materials and direct labor variance analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Instructions Determine (A) the standard cost per unit for direct materials and direct labor; (B) the price variance, quantity variance, and total direct materials cost variance; and (C) the rate variance, time variance, and total direct labor cost variance.
Recompute the variances from the second Acme Inc. exercise using $0.0725 as the standard cost of the material and $14 as the standard labor cost per hour. How has your explanation of the variances changed?
Ribcos labor cost information for making its only product for March is as follows: A. What is the direct labor rate variance? B. What is the direct labor time variance? C. What is the total direct labor variance?
At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the total factory cost variance favorable or unfavorable? (b) Are the controllable and volume variances favorable or unfavorable?
Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 40,000 units of product were as follows: Each unit requires 0.3 hour of direct labor. Instructions Determine (A) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; (B) the direct labor rate variance, direct labor time variance, and total direct labor cost variance; and (C) the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance.
Refer to the data in Exercise 9.15. Required: 1. Compute overhead variances using a two-variance analysis. 2. Compute overhead variances using a three-variance analysis. 3. Illustrate how the two- and three-variance analyses are related to the four-variance analysis. Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total 787,200, of which 556,800 is fixed overhead. A total of 119,400 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were 230,600, and actual fixed overhead costs were 556,250. Required: 1. Compute the fixed overhead spending and volume variances. How would you interpret the spending variance? Discuss the possible interpretations of the volume variance. Which is most appropriate for this example? 2. Compute the variable overhead spending and efficiency variances. How is the variable overhead spending variance like the price variances of direct labor and direct materials? How is it different? How is the variable overhead efficiency variance related to the direct labor efficiency variance?
Calculating factory overhead: two variances Monrovia Manufacturing Inc. normally produces 10,000 units of product A each month. Each unit requires 4 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are 10 and 5 per unit, respectively. Cost and production data for June follow: a. Calculate the flexible-budget variance. b. Calculate the production-volume variance. c. Was the total factory overhead under- or overapplied? By what amount?
Ellis Companys labor information for September is as follows: A. Compute the standard direct labor rate per hour. B. Compute the direct labor time variance. C. Compute the standard direct labor rate if the direct labor rate variance was $2,712.30 (unfavorable).